Question
1. A company is interested on starting a project that will cost $127,000. They expect to receive $43,000 from it every year for the next
1. A company is interested on starting a project that will cost $127,000. They expect to receive $43,000 from it every year for the next 5 years. If the companys cost of capital is 7%, what is the projects NPV? IRR? Payback period? Discounted payback period? Should the project be accepted? 2. Morocco Corporation is considering a project that would cost $40,000. They expect to receive from it $10,000 during the first year, $13,000 during the second year, $13,000 during the third year, and $7,000 on the fourth year. The companys cost of capital is 9%. What is the projects NPV? IRR? Payback period? Discounted payback period? Should the project be accepted?
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